Trillion Dollar Insanity

Listening to the TV and Radio pundits as well as reading the various news sources about the Obama plan for a $1Trillion dollar stimulus plan can make you just plain crazy.   

President Elect Obama wants to spend $500B per year for 2 years on construction projects for roads, bridges, schools and the like to stimulate the economy and “preserve or create 2.5 million jobs.”  Leaving aside the argument that spending nearly $200B in highway projects over the past 2 years is already creating whatever benefit that might bring, let’s consider for a moment some of the logistics involved.

Since the government doesn’t own enough equipment, supplies or labor to actually accomplish the tasks, it will most certainly have to rely on government contracts to accomplish this goal.  These contracts are governed by the Federal Acquisition Regulations(FARs), put in place to prevent fraud, mismanagement or other faults by contractors–in short, to be sure the government gets what it pays for.  

Over the past several years, there have been two major scale infrastructure projects done in ‘crisis mode’ as this stimulus package will be:  post Katrina operations, and the reconstruction of Iraq.  In those cases,the feds used the FARs and provisions for emergency contracting to give contractors huge sums of money and wide latitude to get things done.  As follow up audits have revealed, there have been significant failures spread amongst the successful projects.  In addition, the auditors found very little ‘concrete’ (pun intended) documentation of expenditures to be able to judge whether the contractors did the right thing.  The bottom line, however, is there was huge waste of money, materials and labor in the midst of some success.

Ramping up the federal agencies to handle $500B in contracts per year for 2 years, with a huge political sense of urgency and members of Congress clamoring to have the projects done in their district is a receipe for absolute disaster.  The entire country would be covered in bridges to nowhere, if the environmental lawsuits and other permitting processes don’t grind the whole thing to a halt.

And if that’s not enough, if you use $20M per mile of highway as an estimate of the cost, where will we find the gravel, cement, rebar and steel beams for 25,000 miles of roads per year on very little notice?  How about the trucks, bulldozers and other special equipment?

The whole thing makes no sense at all.